Oil falls but head for 8pc weekly gain

Business Recorder reported that oil prices eased on Friday, though Brent and WTI remained on track for a weekly gain of more than 8 per cent. Brent futures closed at USD104.61 a barrel, a drop of USD3.02 or 2.81 per cent, while WTI finished at USD100.05 after shedding USD2.43. Both benchmarks had touched their highest levels since mid-May earlier in the session.

Earlier gains faded after a Financial Times report said Middle Eastern foreign ministers were seeking a temporary arrangement with Iran to manage shipping through the Strait of Hormuz. That report weighed most heavily on sentiment after Thursday's rise of more than 6 per cent, which followed an escalation in attacks on shipping in the region. Phil Flynn of the Price Futures Group questioned whether the market would stay calm over the weekend, while UBS energy analyst Giovanni Staunovo expected high price volatility to persist.

US diesel prices crossed USD6 a gallon on Thursday, a level never previously reached, according to GasBuddy. Commerzbank now expects Brent to reach USD85 a barrel by year-end, up from USD75, and sees diesel at USD1,200 a ton compared with USD950 previously. Separately, the International Energy Agency put Saudi Arabia's August crude supply at 6 million bpd, its weakest reading in over three decades.